Oil Prices Jump Over 2% as U.S. Strikes on Iran Renew Middle East Supply Fears

• Brent crude climbed above $77 per barrel after renewed U.S.-Iran hostilities reignited supply disruption concerns.
• Iran announced the closure of the Strait of Hormuz, while vessel traffic through the key oil transit route fell sharply.
• Higher crude prices could lift Nigeria’s oil earnings but also heighten inflationary pressures across the economy.

July 13, () — Global oil prices climbed more than 2 percent on Monday after fresh military strikes between the United States and Iran reignited concerns over disruptions to global energy supplies through the Strait of Hormuz, one of the world’s most critical oil transit routes.

Brent crude futures gained $1.67, or 2.2 percent, to $77.68 per barrel, while U.S. West Texas Intermediate (WTI) crude rose $1.59, or 2.23 percent, to $73.00 a barrel as traders priced in the risk of prolonged instability in the Middle East.

The rally followed renewed hostilities over the weekend, with Iran reportedly targeting U.S. military facilities across the Gulf before announcing the closure of the Strait of Hormuz, a waterway that handled roughly one-fifth of global oil and liquefied natural gas exports before the conflict intensified.

ran’s Revolutionary Guards later said they had launched attacks on U.S. military bases in Kuwait and Bahrain, further escalating regional tensions.

Ship-tracking data showed traffic through the strait dropped to a five-week low on Sunday, with only six vessels transiting the route, according to Kpler.

Despite Iran’s announcement, U.S. President Donald Trump insisted commercial shipping remained unaffected, saying the waterway was “open” while accusing Tehran of abandoning a negotiated agreement before launching fresh attacks.

Meanwhile, analysts at Goldman Sachs said ongoing investments in pipeline infrastructure across the Gulf could reduce future reliance on the Strait of Hormuz.

The investment bank estimates that alternative export capacity could exceed 14 million barrels per day by 2028, allowing more than 60 percent of Gulf oil exports to bypass the strategic chokepoint.

What it means for Nigeria

For Nigeria, the renewed tensions in the Middle East present a mixed economic picture. On one hand, higher crude oil prices could provide a welcome boost to government revenues, foreign exchange earnings, and fiscal stability at a time when the country is recording its strongest crude production performance in more than six years.

According to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigeria produced an average of 1.56 million barrels of crude oil per day in June 2026, exceeding its OPEC quota of 1.5 million barrels per day.

Combined crude oil and condensate production also increased to 1.735 million barrels per day, positioning the country to benefit from elevated global oil prices if the rally is sustained.

The gains, however, could come with high costs. Although Nigeria is Africa’s largest crude oil producer, it still depends partly on imported refined petroleum products to meet domestic demand.

Higher international crude prices typically increase the cost of petrol, diesel, aviation fuel and other refined products, potentially raising transportation costs, food prices and operating expenses for businesses.

That creates fresh inflationary risks across several sectors of the economy. Manufacturers could face higher energy and logistics costs, airlines may contend with more expensive aviation fuel, while households could see higher transport fares and rising prices for essential goods as businesses pass on increased operating costs to consumers.

For policymakers, the latest escalation underscores Nigeria’s familiar oil paradox: rising crude prices strengthen government revenues and export earnings, but they can also fuel inflation and increase the cost of living unless growing domestic refining capacity helps cushion the impact of higher global energy prices.

With tensions in the Middle East showing little sign of easing, developments around the Strait of Hormuz will remain a key focus for global energy markets.

For Nigeria, the trajectory of the conflict will not only influence oil revenues but could also shape inflation, consumer spending and broader economic stability in the months ahead.